Retrenching

I’ll be re-aligning the main trading portfolio over the next month or so.

I took a loss in a bear put spread on ARKK.  This is a position that was recommended behind the paywall at Stansberry.  The analyst has been spot on on most trades but whiffed this one badly.  I didn’t learn my lesson with TSLA, it appears.  Never bet against “cult” stocks.  I booked 3,064 in losses on 4,413 in capital at risk over 5 days.  I am taking this as an opportunity to retrench.

I sold BLCN for a 837 dollar profit 1,742 capital at risk over 128 days or 137% annualized.  I also sold the shares of SII I have been holding in my main trading account.  The shares in the tIRA remain.  I booked 7,880 in profit on 10,000 capital at risk over 1,039 days or 28% annualized.  I will say goodbye to CLNY and PSEC at the March expiry due to covered calls.  I will also sell the underlying in FLO and KMB which will not be called.  I expect ABBV to be called away in April.  Altogether, these moves look to raise about 75,000 in cash.

I’ll be deploying 50,000 of my newly raised cash into CSQ, PDT, FEO, ETV, and UTG.  This mini portfolio of historically well performing CEFs will have a weighted average yield of around 8.23%.  This will increase passive cash flow by about 4,100 dollars and get me to about 65% of budget needs covered passively.  Even with some recent missteps, I should be at 100% of budget covered by trading profits by June.  The balance of the year’s trading profits will go to accumulating more passive income with the goal of getting to 100% of budget coverage.

I’ll still have $25,000 or so in latent cash.   Most of this will be used to write cash secured puts and for trading in net debit spreads.  Right now, PSEC puts at the 7 strike are paying about 27% annualized.  Assignment means picking up a tasty underlying yield and writing covered calls for more income.

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